Borealis finds value in social responsibility

The idea came to Jules Paquette and Patrick Gregoire in 1999. They were in Chad, in central Africa, working for ExxonMobil. The oil and gas giant was developing a 1,000-kilometre pipeline, a project requiring many tasks, from negotiating land access rights to doling out compensation. In other words, the pipeline route was dotted with ExxonMobil obligations and promises. Keeping those promises was difficult and time consuming, and Mr. Paquette and Mr. Gregoire quickly realized that large energy and mining companies need help. In 2004, the two Université de Sherbrooke geography grads formed Borealis, a Magog, Que.-based company that helps those companies meet their corporate social responsibility commitments. Borealis’ co-founders now find themselves in the midst of a rapid global expansion. Mr. Paquette, Borealis’ chief executive, discussed his company’s growth — and growing pains — with Quentin Casey. The following is an edited transcript of their conversation.

QBorealis is now working in 25 countries, including Australia, Peru, Mongolia and 12 African nations. You’ve got 75 clients, including ExxonMobil and mining giant Rio Tinto. How does your software help those companies?

A They make lots of commitments when they’re trying to develop their projects — from environmental goals to social responsibility promises. We put in place a system to ensure those commitments are all tracked and executed. Essentially we help them walk the talk.

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QYour revenue jumped to $16.5-million in 2012, from $6.5-million in 2011, and it is forecast to hit $25-million this year. Your workforce, meanwhile, more than doubled to 150 in 2012 and is expected to reach 200 this year. What explains your recent growth?

A Oil and gas and mining companies want to improve their reputations. They’re clamouring for help. Up until this year we didn’t even have dedicated sales personnel. Companies are calling us more than we’re calling them. Corporate social responsibility is a topic everyone is talking about. It’s part of executive bonus schemes. There’s a big change happening in the industry.

QWhat’s the long-term outlook for Borealis?

A This year is pretty much booked up. Within five to eight years, I expect we’ll have a workforce of 500 and annual revenue of $100-million. The growth potential is quite significant.

A I would think so. We’re working with Pemex, the Mexican state oil giant. They control everything from extraction to distribution. You drive around Mexico and it’s all Pemex gas stations. Toward the end of this year we might be up to 50 people in Mexico.

QWhy did Pemex approach you?

A They have many projects that significantly impact local communities. The first Pemex project we’re involved with involves shale oil. They have to dig thousands of wells and install many pipelines. And then there’s the whole fracking issue. Pemex is basically looking to improve its approach in dealing with local communities. It marks a significant change in the industry in Mexico.

QWhat is motivating companies like Pemex to change their approach?

A It goes beyond reputation. The biggest motivation is to ensure that communities don’t protest, delay or stop projects. For Pemex, there’s no way to put security forces along thousands of kilometres of new pipeline. But if you build long-term relationships with communities, they will protect the infrastructure because they’re part of the project. If the community buys in, they will defend it.

QYou’re growing quickly. What growing pains have you experienced?

A Maintaining sufficient office space has always been a challenge. That problem is going to be resolved at last in 2013. We’re building a $2.5-million head office. It will give us a fair bit of flexibility for future growth. We should be moved in by April.

Q What other pressures have you faced?

A Managing cash flow is quite a challenge, especially when you’re growing very fast. We’re working with very large companies, many of whom pay at their own rhythm. And then there’s the challenge of focusing your efforts. We are involved in many countries and the only way to successfully develop in a country is by being there — to meet with potential clients and win projects. But you can’t be everywhere. So you have to focus your efforts. It’s very easy to over-extend yourself. That can be a mistake.

QYour growth has earned you some hardware. You’re on Deloitte’s list of the top 50 fastest growing tech companies in Canada, and last October you won International Business of the Year at the HSBC International Business Awards. What impact have those honours made?

A It definitely helps us. Ninety-five per cent of our business is abroad. All of those prizes are recognized in other parts of the world. It’s a sign of a dynamic company.

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